Month: September 2007

James Buchanan Convinced Harry Johnson to Over-Rule the Referees

 

  James Buchanan (center) flanked by economics graduate students at the the closing dinner of the 2007 Summer Institute for the Preservation of the History of Economics, held at George Mason University.  (Source of photo:  me.)

 

On the evening of Thursday, June 7, 2007, Nobel-prize-winner James Buchanan joined participants for their final dinner-gathering at George Mason’s Summer Institute for the Preservation of the History of Economics.

As a young economist, you are advised that it is never productive to dispute the decisions of journal editors. 

But Buchanan, in conversation during the dinner, mentioned that he had only once disputed a journal rejection–of an article submitted to the JPE during Harry Johnson’s editorship.  Buchanan said that he wrote Johnson a letter explaining that the referees had totally misunderstood his paper; Johnson read the paper himself, agreed with Buchanan, and published it.

This tells us something about Buchanan, but also something about Johnson.  I never took a class from Johnson, but had a conversation with him at a party or reception once, in the last year or two before his death.  All I remember about the conversation was that he was polite and respectful to an unknown graduate student, and that somehow we got onto the topic of car advertising.

I remember hearing that sometimes Harry Johnson whittled on wood carving projects during committee meetings.  Someone asked him why he did that, and he is reputed to have responded that at the end of the meeting he liked to feel as though something at been accomplished.

 

Reagan’s “Crazy” Speech Inspired Lessig to Pursue the “Impossible”

 

Mr. Lessig has become the standard-bearer for those who see copyright law as too protective of original creators and too stifling of the artists who follow them. That position has made him the darling of those who want a relatively unfettered Internet, whether it be music sharers or online poem reprinters.

But it has also made him an opponent of many big media companies, including the Walt Disney Company, whose signature creation, Mickey Mouse, would have passed into the public domain years ago if not for a series of well-timed extensions to the law.

. . .

. . . , it might surprise many of Mr. Lessig’s supporters to find that his inspiration for his copyright work was Ronald Reagan.

“I heard George Shultz give a talk in Berlin on the 20th anniversary of Reagan’s ‘tear down this wall’ speech,” Mr. Lessig said. “It was very moving to be at this event. Many of the Germans in the audience were moved to tears. They said that at the time this happened, it was impossible to see this change happening.”

In recalling his thoughts on the possibility of communism falling, he said, “When I heard Reagan’s speech, I remember thinking, ‘boy, he is crazy,’ ” he said.

It is fair to say you can quote him on that.

 

For the full story, see: 

NOAM COHEN.  "LINK BY LINK; Taking the Copyright Fight Into a New Arena."  The New York Times   (Mon., July 2, 2007):  C3.

 

Cambridge Ignorant of Schumpeter

 

  The house in Cambridge, Mass. where Schumpeter lived for many years.  Source of photo:  F.M. "Mike" Scherer, posted with his permission.

 

On his way from his home to his Harvard Office, Mike Scherer walks near the homes in which Joseph Schumpeter lived over 50 years ago.

Scherer reports that the streets of Cambridge are replete with historical markers documenting the significance in intellectual history of various houses and locales.

Across the street from the impressive house in which Schumpeter lived for over 15 years, for instance, there is a sign indicating where the poet T.S. Elliot had lived for a year during a sabbatical.

But there is no sign in front of either of the homes in which Joseph Schumpeter lived (or in front of the home in which Nobel-prize-winner Wassily Leontief lived).

Scherer thinks the lesson is that economists should be more humble.  I think that the lesson is that the citizens and officials of Cambridge should be less ignorant.

 

The above account is partly from my memory of Scherer’s oral remarks in June at George Mason at the Summer Institute for the Preservation of the History of Economics.  Here is a briefer version he sent me in an email dated 12/20/2006:

Since moving back to Harvard, I often walk to my home in West Cambridge. The shortest route is via Ash Street, right by Schumpeter’s first own home in Cambridge. The neighborhood is full of houses with historical plaques, but I looked in vain for Schumpy’s. However, across the street is a house in which T. S. Eliot lived for two years. It has a plaque! That’s a profound statement on the relative value of what we academics do.

 

    From top to bottom, for the four photos at the bottom of the entry:  The first is of the house in which Schumpeter lived for many years.  The second is of a house where Schumpeter lived for a short time.  The third is of the street signs at the corner near one of Schumpeter’s houses.  The fourth is one of the many plaques that Cambridge installs to honor those who the Cambridge community deems worthy of honor.  All of the photos above were taken on or about May 27, 2007 by F.M. "Mike" Scherer, who kindly gave them to me and gave me permission to post them.

 

Europeans Have More Leisure, But Not More Happiness

 

Perhaps the commentary excerpted below goes a bit too far.  I do not believe that paid work is necessary for happiness.  But I do think that a life mainly of leisure can wear thin.  A few months ago I heard Deirdre McCloskey say that we need "projects" to keep us moving forward.  I think that is right, and the best work involves challenging, meaningful projects.

 

By almost every measure, Europeans do work less and relax more than Americans. According to data from the Organization for Economic Co-operation and Development, Americans work 25% more hours each year than the Norwegians or the Dutch. The average retirement age for European men is 60.5, and it’s even lower for European women. Our vacations are pathetically short by comparison: The average U.S. worker takes 16 days of vacation each year, less than half that typically taken by the Germans (35 days), the French (37 days) or the Italians (42 days).

. . .

For most Americans, work is a rock-solid source of life happiness. Happy people work more hours each week than unhappy people, and work more in their free time as well. Even more tellingly, people with more hours per day to relax outside their jobs are not any happier than those who have less non-work time. In short, the idea that our heavy workloads are lowering our happiness is twaddle.

. . .

This may be one reason why Americans tend to score better than Europeans on most happiness surveys. For example, according to the 2002 International Social Survey Programme across 35 countries, 56% of Americans are "completely happy" or "very happy" with their lives, versus 44% of Danes (often cited in surveys as the happiest Europeans), 35% of the French and 31% of Germans. Those sweet five-week vacations and 35-hour workweeks don’t seem to be stimulating all that much félicité. A good old-fashioned 50-hour week might be a better option.

 

For the full commentary, see: 

ARTHUR C. BROOKS.  "Happy for the Work."  The Wall Street Journal  (Weds., June 20, 2007):  A16. 

(Note:  ellipses added.)

 

Astronauts (and the Rest of Us) Would Benefit from More Unscripted Time

 

Noctilucent clouds.  Source of photo:  http://apod.nasa.gov/apod/image/9907/noctilucent_pp.jpg

 

The excerpt below is from a WSJ summary of an article from the  June 2007 issue of Seed.

 

Many other scientific discoveries have come from astronauts puzzling over strange sights around them. Most of what is known about so-called noctilucent clouds — thin, beautiful wisps that hover at the edge of the Earth’s atmosphere — comes from 30 years of astronauts sketching and trying to photograph them in their spare time. The strength of a certain type of cosmic ray was first recognized in 1969 when Buzz Aldrin asked fellow astronauts if they, like him, were seeing occasional streaks of light when their eyes were closed.

Such discoveries off the beaten path of the National Aeronautic and Space Administration’s research agenda prompt the question attributed to an Apollo program geologist: "If human beings can do much better science than robots, why does NASA make its astronauts do science like robots?"

 

For the full summary, see: 

"Informed Reader; SCIENCE; Why Astronauts Need Down Time in Space."  The Wall Street Journal (Weds., May 9, 2007):  B15.

 

The U.S. has Exceled at Turning Information Technology into Greater Productivity

 

To explain the experience in the United States, one would have to believe that Americans have some better way of translating the new technology into productivity than other countries. And that is precisely what Professor Van Reenen’s research suggests.

His paper ”Americans Do I.T. Better: U.S. Multinationals and the Productivity Miracle,” (with Nick Bloom of Stanford University and Raffaella Sadun of the London School of Economics) looked at the experience of companies in Britain that were taken over by multinational companies with headquarters in other countries. They wanted to know if there was any evidence that the American genius with information technology transfers to locations outside the United States. If American companies turn computers into productivity better than anyone else, can businesses in Britain do the same when they are taken over by Americans?

And in the huge service sectors — financial services, retail trade, wholesale trade — they found compelling evidence of exactly that. American takeovers caused a tremendous productivity advantage over a non-American alternative.

When Americans take over a business in Britain, the business becomes significantly better at translating technology spending into productivity than a comparable business taken over by someone else. It is as if the invisible hand of the American marketplace were somehow passing along a secret handshake to these firms.

. . .

But there is a chance that the 1990s represent a fundamental shift in the global economy. Perhaps the greater amount of uncertainty and churn in the world economy in the 1990s is the new norm. Perhaps the 21st century will continually favor those who adjust best to changes. As Professor Van Reenen put it, ”If the world has become one in which everyone is trying to hit a moving target, it certainly helps to be the best at changing one’s aim.”

But that is, of course, the paradox of the American position. We hate experiencing major adjustments and industry transformations that force people to look for new jobs. That experience has made many skeptical about the future of the United States in the world economy. Yet the evidence seems to show that for all our dissatisfaction, we are the most flexible economy around and may be best poised to take advantage of the coming changes on a global scale precisely because we are so good at adjusting. 

 

For the full commentary, see: 

AUSTAN GOOLSBEE. "ECONOMIC SCENE; How the U.S. Has Kept the Productivity Playing Field Tilted to Its Advantage."  The New York Times  (Thurs., June 21, 2007)  C3.

(Note:  ellipsis added.)

(Note:  I thank Aaron Brown for calling the above article to my attention.)

 

The End of “the Road to Socialism”

 

     The frenetic pace of productive work at a Chavez socialist farm cooperative in Santa Barbara, Venezuela.  Souce of photo:  online version of the NYT article quoted and cited below. 

 

(p. A1)  Mr. Chávez’s supporters have formed thousands of state-financed cooperatives to wrest farms and cattle ranches from private owners.  Landowners say compensation is hard to obtain.  Local officials describe the land seizures as paving stones on “the road to socialism.”

. . .

(p. A10)  But while some of the newly settled farming communities are euphoric, landowners are jittery.  Economists say the land reform may have the opposite effect of what Mr. Chavez intends, and make the country more dependent on imported food than before.

The uncertainties and disruptions of the land seizures have led to lower investment by some farmers.  Production of some foods has been relatively flat, adding to shortages of items like sugar, economists say.  

 

For the full story, see: 

SIMON ROMERO.  "Clash of Hope and Fear As Venezuela Seizes Land."  The New York Times  (Thurs., May 17, 2007):  A1 & A10.

(Note: ellipsis added.)

 

How to End Poverty

 

To find policies that are likely to alleviate poverty, it is best to look at actual successes and failures. In recent decades, the biggest single accomplishment is the post-1979 (post-Mao) economic growth in China. Xavier Sala-i-Martin ("The World Distribution of Income," Quarterly Journal of Economics, May 2006) finds that the number of persons below a standard poverty line fell in China by about 250 million from 1970 to 2000. This massive poverty reduction occurred despite an increase in the Chinese population of more than 400 million and rising income inequality within China. The second-best story is the economic growth in India, where the poverty count fell by around 140 million people from 1970 to 2000.

Also illuminating is the greatest tragedy for world poverty — the low economic growth in sub-Saharan Africa. In this case, the number of people in poverty rose by around 200 million from 1970 to 2000.

These examples suggest that the key question for poverty alleviation is how to get Africa to grow like China and India. An important clue is that the triumphs in China and India derive mainly from improvements in governance, notably in the opening up to markets and capitalism. Similarly, the African tragedy derives primarily from government failure. Another clue is that foreign aid had nothing to do with the successes and did not prevent the African tragedy.

One reason for this is that foreign aid is typically run through governments and, thereby, tends to promote public sectors that are large, corrupt and unresponsive to market forces.

 

For the full commentary, see: 

ROBERT BARRO.  "COMMENTARY; Bill Gates’s Charitable Vistas." The Wall Street Journal  (Tues., June 19, 2007):  A17.